Farmer tiff worries PepsiCo headquarters

By Times Of India on 29 Apr 2019 | read
(This article was originally published by the Economic Times on 29/04/2019)
NEW DELHI: Executives at Pepsi-Co’s headquarters and its Asia-Pacific office are said to have conveyed their concern over the Indian unit’s decision to take legal action against Gujarat farmers for growing a variety of potato following social media hostility and calls for a boycott of the company’s products.

“Headquarters has asked PepsiCo India to resolve the issue at the earliest and work as a team,” said one of two senior executives aware of developments. “They are concerned about the legal issue and the backlash.” The Apac office is in Dubai.

PepsiCo has sued nine farmers in Gujarat for alleged “rights infringement” on the grounds that they “illegally” grew its registered FC5 potato variety used to make Lays chips.

Free to make decisions: Pepsico India

A PepsiCo India spokesperson said the local unit is free to make its own decisions.

“The local team at PepsiCo India is fully empowered to ‘act as owners’ and equipped to take decisions based on local market conditions,” the spokesperson said. “Beyond this, there is nothing more to add.”

He didn’t respond to queries about any worries that may have been expressed by executives at the Dubai office and head office in New York.

"Unfortunate to have been dragged in the court by PepsiCo": Gujarat potato farmers
Appearing before the Commercial Court wherein four from Sabarkantha district have been accused by PepsiCo of using its registered variety of potato seed, the farmers sought time till June 12 to respond.
Activists seek Centre's intervention in PepsiCo's case against potato farmers
Nine farmers from Sabarkantha and Aravalli districts have been dragged to court by PepsiCo for allegedly growing a variety of potatoes for which it has claimed Plant Variety Protection (PVP) rights.
PepsiCo has a potato issue with farmers
The US multinational had sued nine farmers for alleged "rights infringement" by illegally dealing with its registered potato variety used in its Lays chips.

Bharatiya Janata Party (BJP) and Congress leaders tweeted against the company’s decision to sue farmers in Gujarat over the weekend. On Friday, PepsiCo had offered to withdraw the suits against the farmers if they stop growing the FC5 variety. The farmers have sought time till June 12 to respond.

“I am giving an ultimatum to Pepsi India to withdraw cases against Indian farmers in the next 72 hours, otherwise we will start a campaign to boycott all PepsiCo products in India,” tweeted Tajinder Pal Singh Bagga, a spokesperson of the BJP’s Delhi unit.

The farmers have maintained that PepsiCo acted in violation of the Protection of Plant Variety and Farmers Right Act (PPVFR Act), which seeks to protect specified plant varieties, rights of farmers and plant breeders, and encourages development and cultivation of new varieties of plants.

Congress leader Ahmed Patel condemned PepsiCo’s move.

“PepsiCo’s decision to take Gujarat’s potato grower farmers to court is ill-advised and brazenly wrong. It is in violation of the farmer’s rights under the PPVFR Act.” He added that the state government “shouldn’t keep its eyes shut… Corporate interest cannot dictate what our farmers must or mustn’t cultivate.”

For the maker of Pepsi cola, Lays chips and Quaker oats, India is a critical market at a time when mature markets such as the US have slowed. Being perceived as antifarmer could send the wrong message, experts said.

“A large global company suing farmers is bad optics under any circumstance,” said Lloyd Mathias, formerly with PepsiCo’s leadership team and now an independent business consultant. “PepsiCo could have found a better approach to protect its interests. This could have a negative fallout for PepsiCo in India.”

PepsiCo told the Ahmedabad court on Friday that it has proposed to “amicably settle with people who were unlawfully using seeds of its registered variety”.

The company said on Friday that “PepsiCo has also proposed that they (the farmers) may become part of its collaborative potato farming program. In case they do not wish to join this program, they can simply sign an agreement and grow other available varieties of potatoes”.

The company said in its statement that it was “compelled to take the judicial recourse as a last resort to safeguard the larger interest of thousands of farmers that are engaged with its collaborative potato farming program”.

Advocate Anand Yagnik, who had appeared on behalf of the farmers, accused PepsiCo of “corporate arrogance”, adding, “An MNC enters into our farmlands, procures crops without our knowledge and frames us. It is infringing upon the right to privacy and dictating terms about what we should eat. This is unacceptable.”

Yagnik said PepsiCo officials entered farms with advocates and collected crop samples without the knowledge of farmers. “The entire process of evidence collection was flawed,” he said.

PepsiCo has registered separate cases against nine farmers of the state so far for allegedly using the potato variety, for which it has exclusive rights in India. The company also sought damages of Rs 1.5 crore each from four farmers of the Sabarkantha district. Five other farmers were sued by Pepsi-Co in north Gujarat under similar charges in 2017-18.